Cartel agreements tend to fail:
I. if they produce manufactured rather than natural goods.
II. if they produce natural rather than manufactured goods.
III. in the long run as demand curves become more elastic.
A) I only
B) I and III only
C) II and III only
D) III only

Question

Quizplus · Accepted Answer

Cartel agreements tend to fail when they produce manufactured goods rather than natural goods, as it is easier for individual producers to differentiate their products in the market. Additionally, in the long run, demand curves for goods become more elastic as competitors enter the market and prices rise due to the cartel agreement, making it harder for the cartel to maintain its hold on the market.

Cartel Agreements Tend to Fail